F&B retailer B&S International has filed an application for an IPO.
B&S, which holds the Hong Kong rights to take-away beverage brand TenRen Tea, has a 27-year history of distribution and retailing.
In retail, B&S sells overseas branded F&B products at its own 38 retail outlets in Hong Kong.
In the distribution business it offers more than 100 F&B brands from Argentina, China, Japan, Malaysia, Taiwan, the UK and Turkey. The products are distributed to supermarkets, pharmacies, convenience stores, department stores, bakeries, confectionery stores and trading companies.
B&S also provides supply-chain services such as arranging inbound logistics, relabelling products to comply with the Hong Kong food-safety and labelling laws, repackaging products to suit the needs of retailers or consumers, and formulating marketing and sales strategies.
TenRen Tea, which is sold at bookstore Eslite, is the largest revenue contributor in the retail business, accounting for 92.2 per cent of income. With a market share of 24.3 per cent, it is a premier Taiwanese tea-based beverage brand with retail outlets spanning Australia, Canada, Hong Kong, Japan, Malaysia, Singapore, North America and Taiwan.
B&S primarily offers takeaway drinks at its 29 TenRen Tea outlets, including milk tea, classic tea, juicy tea, icy drinks and its winter decaf series. Other products include tea-flavoured ice cream, packaged tea leaves, packaged snacks and tea wares.
Its three licensed Uncle Tetsu Japanese cheesecake retail outlets in Hong Kong have contributed up to 9.4 per cent of revenue in the past several years. These shops mainly offer cheesecakes, cheese tarts and panna cotta.
Three Hotel Chocolat stores, a British chocolate brand, have yet to make a significant contribution.
Capital raised through the IPO will be used to open retail outlets, lease and set up warehousing, and upgrade the enterprise resource planning system. The proceeds will also be used to hire three more marketing/sales personnel for the distribution business.
The company has a high debt-to-assets ratio, the gearing ratio exceeding 109.8 per cent in the past three years, reports The Standard. While net profit and revenue have grown in the past three years, B&S considers cashflow as a risk so needs to rely on internal resources and bank borrowings to maintain cashflow and to fund daily business.